Dairy product prices fell again at today’s (Tuesday) Fonterra Global Dairy Trade auction.
The event represents the third negative auction for prices in a row.
Average prices paid at the auction fell 3.6% on the last event held two weeks previously which itself was down over 8%.
- AMF index up 2.3%, average price US$3,744/MT
- Butter index down 6.6%, average price US$3,026/MT
- BMP index up 2.1%, average price US$2,208/MT
- Ched index up 2.7%, average price US$2,888/MT
- LAC index not available, average price US$572/MT
- RenCas index down 0.6%, average price US$6,949/MT
- SMP index down 7.8%, average price US$2,253/MT
- SWP not offered
- WMP index down 4.3%, average price US$2,446/MT
Milk Price impact
Movements in the dairy market prior to today’s auction would see milk prices at 26.6c/L, according to ICOS’s latest analysis of the market.
ICOS said it seemed like the entire dairy sector groaned in unison on as news of the previous GDT auction spread.
“Farmers were breathing a sigh of relief at quota ending, co-ops were dealing with the collection and processing of a massive volume of ‘held-over’ milk, and policy makers were marking the big day with various dairy themed events.
“The news of the 10.8% Index drop, following an 8.8% drop a fortnight earlier certainly introduced a balanced tone to any celebrations,” it said.
Meanwhile, ICOS says last week’s eurex butter and SMP indices show a significant, consistent weakening of markets in the past month.
The current butter index price, of €3,130 is down almost €270 in month, with the SMP index price of €2,032 down €235 in the same period.
ICOS says that’s equivalent to 3.3c/L in milk value lost since early March and suggest a milk value of around 26.6c/L including VAT – significantly lower than the current milk price, it says.